This report examines a common misperception in the international community: that patents and IP incentives block access to medicines.

An age-old debate: Patents and access

Discussions over the impact – positive or negative; rarely neutral – that IP rights have had and continue to have on the creation and dissemination of new ideas and commercial products is as emotional as it is part of economic and social history. This is particularly the case for medical and biopharmaceutical innovation where IP incentives are frequently lambasted. At heart of much of this criticism is a deep skepticism of the value that IP rights bring to biopharmaceutical innovation.

One of the standing arguments made is that IP rights limit access to medical products and technologies in lower and middle income countries.

But is this true?

One area which is frequently overlooked within this debate is the issue of access to essential medicines, the majority of which are actually off-patent.

Although mostly off-patent and generic, essential medicines are not available to many patients in lower and middle income countries

Using survey data from the WHO Unlocking Global Health finds that of medicines considered to be essential in most countries, on average only about 40% are estimated to be available through public sector outlets in lower and middle income countries. Despite major economic and technological advances over the past decades, significant discrepancies continue to exist in access to, and availability of, even the most basic medicines, particularly through the public sector in these countries.

And this has nothing to do with IP rights: the vast majority – over 90% – of medicines viewed as essential (as compiled on essential drugs lists by the WHO and numerous individual countries) are off-patent.

If not patents – than what’s blocking access?

Unlocking Global Health examines the relative importance of a range of barriers to access to essential medicines. Looking at 20 different factors affecting access the study finds that the most substantial barriers to availability of essential medicines are in two main areas:

inadequate healthcare financing; and

additional costs in the supply chain including tariffs and taxes on medicines.

The findings of Unlocking Global Health show that the concrete barriers to access to medicines in lower and middle income countries are not in the field of IP rights but in the real world of bread and butter economics.

Many low and middle income countries have woefully underfunded health systems and lack basic health infrastructure and capacity. India is a good example of this. Despite heavy restrictions on biopharmaceutical IP rights – including restrictive patentability criteria and active use of compulsory licenses – the Indian health system does not provide its citizens with excellent access to medicines. Close to three quarters of Indians living in rural areas have limited or no access to basic care, including pharmaceuticals. This despite the fact that generic manufacturing dominates the domestic market. At root of this problem is not the protection of IP but the fact that India spends a very small amount – only around 4.2% – of its GDP on healthcare and has an underdeveloped health system that cannot cater to its citizens’ needs.

The solution to the access to essential medicines challenge lies not in existential debates over the value of biopharmaceutical IP incentives. As Unlocking Global Health shows for essential medicines – which are predominantly generic follow-on products – these debates are irrelevant.

David’s focus is policy and economic analysis related to innovation, health care, pharmaceuticals, tax and intellectual property. He has wide experience in quantitative research methods including index-building and data sampling and is the author of a number of both academic and commissioned publications. David’s knowledge spans from North America and Europe to the BRIC economies, and he speaks fluent Swedish.
Prior to his work with Pugatch Consilium, David was with Deloitte LLP where he worked on a broad range of UK and international tax compliance and advisory projects.
David holds a Master of Studies and DPhil (PhD) from Oxford University.